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The expert group is helping the EC set up model contract terms for cloud service providers and customers

The expert group is helping the EC set up model contract terms for cloud service providers and customers

Following announcements made this Summer the European Commission this week begun work on setting out standard terms for cloud contracts. The Commission says an expert working group will help ensure the inclusion of fair contract terms in cloud service contracts becomes best practice and improve confidence in cloud services.

The working group will work towards developing safe and fair terms for cloud computing contracts that can be used as a model for the industry. The broadly based group counts Skyscape, The European CIO Association and Telecom Italia among its 30 members – which includes representatives from cloud service providers, SMEs, consumers, academics and legal professionals.

“At the European Council last week, EU leaders called for action to help create a single market for cloud computing. The Commission is delivering its bit. Making full use of the opportunities presented by cloud computing could create 2.5 million extra jobs in Europe and add around one per cent a year to EU’s Gross Domestic Product by 2020,” said Vice President Reding, the EU’s Justice Commissioner.

“We are asking experts to provide a balanced set of contract terms for consumers and small and medium-sized enterprises to use cloud computing services with more confidence. Trust is bankable – citizens need to be able to trust that the services they use are fair and reliable,” she added.

The Commission’s efforts in this area are part of a broader strategy to address the nascent nature of the cloud sector and the standards used therein, whether technical or legal.

A key component of the Commission’s Cloud Computing Strategy includes coordinating technical interoperability standards development with the European Telecomunications Standards Institute (ETSI). These efforts are being mirrored by a number of standards development and certification bodies like IEEE and the CSA in a bid to enable service providers to better integrate and federate services at a technical level.

But according to cloud customers SLAs and contracts also need work. According to a survey published in August by Gartner four in five cloud customers find their contracts too vague, particularly the security provisions often included therein, which has created frustration for consumers of enterprise IT. The firm said this frustration is primarily due to the lack of standards in cloud contracting – which creates an imbalance in the relationship between cloud service providers and consumers of those services.

“The objective is to identify best practices for addressing the concerns of consumers and small companies, who often seem reluctant to purchase cloud computing services because contracts are unclear,” the Commission said. “Model contract terms can help to facilitate contractual arrangements between cloud computing service providers and consumers and small firms. They can also facilitate the application of EU data protection rules to the extent that they are relevant to cloud computing contracts.”

The group of experts will begin developing model cloud contracts in late November with the aim of releasing a policy paper in the Spring of 2014 that will include suggestions on model contracting clauses for cloud services.